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Japan accelerates work on digital currency

Photo of: Nathan VDH
by Nathan VDH

Japan’s ruling Liberal Democratic Party will ask the government to launch a digital currency “as soon as possible” to avoid falling too far behind other nations, including China.

According to Jiji, via the Japan Times, the party, which recently elected Yoshihide Suga to become its leader and the country’s prime minister, is due to publish a report “before the end of the year”, urging Tokyo to “draft a comprehensive law promoting economic security for the whole society, including the private sector”.

The report, the news agency said, will seek to create a law that will legislate for “the introduction of a digital currency central bank as soon as possible and would facilitate its use by working closely with Western nations”.

The report also recommends that Tokyo prioritize work on so-called “6G” technology, with the aim of creating the world’s first 6G products and “having them adopted as international standards”.

The party has 113 of the 245 seats in Parliament and is currently in coalition with the 28-member Komeito Party. This means that if the ruling party were faced with a vote on a concerted effort to enshrine these policies in law, it would probably easily get what it wants.

The Central Bank of Japan (BoJ), like its counterpart in South Korea, the Bank of Korea (BOK), has so far refused to engage in issuing digital currency. Pilot projects, legal reviews and feasibility checks are, however, underway or in preparation in both countries.

Until the beginning of the year, both the BoJ and the BOK had shown disdain for the issuance of digital currency. But media and industry experts in both countries told Cryptonews.com that Tokyo and Seoul now fear that China’s rapidly developing digital yuan project could give their East Asian rival a head start in the technology race, especially as Beijing hopes to use the digital yuan in cross-border trade agreements with its international allies.

This comes after a recent report from Japanese industry actors warning that China had as much as six years advance on its asian neighbours in the development of its state-backed cryptocurrency. You can read all about it in our article.